The "allowance rate" sharply increased during Obama's first term.

When David Kappos announced his resignation as head of the United States Patent and Trademark Office (USPTO) late last year, one of his most touted accomplishments was a significant reduction in the backlog of pending patent applications. Kappos' fans have attributed this to the hiring of hundreds of additional patent examiners.

But a new study suggests another explanation for the declining backlog: the patent office may have lowered its standards, approving many patents that would have been (and in some cases, had been) rejected under the administration of George W. Bush. The authors—Chris Cotropia and Cecil Quillen of the University of Richmond and independent researcher Ogden Webster—used Freedom of Information Act requests to obtain detailed data about the fate of patent applications considered by the USPTO since 1996.

They found that the "allowance rate," the fraction of applications approved by the patent office, declined steadily from 2001 and 2009. But in the last four years there's been a sharp reversal, with a 2012 allowance rate about 20 percent higher than it was in 2009.

Patent pending

Calculating the real allowance rate is tricky because inventors can submit the same application multiple times. "From the perspective of the patent office, a 'final rejection' doesn't get rid of an application," Quillen told Ars in a December phone interview. If an application is rejected, the inventor can make minor changes to the application and file it again. "The only way you can reduce your numbers and get rid of somebody is to allow the case," Quillen said.

There are a number of different ways to re-file applications, with names like File Wrapper Continuations, Continued Prosecution Applications, Requests for Continued Examination and Continuation-In-Part Applications. But in all cases, the upshot is the same: the applicant gets another shot at convincing examiners to grant him a patent.

The ease with which applicants can re-file the same application leads to misleading official statistics suggesting the patent office is pickier than it really is. If an examiner rejects an application twice before finally granting a patent on the third try, that might be counted as two rejections and one acceptance, for a 33 percent acceptance rate. But it probably makes more sense to consider the three filings as part of the same application process, for a 100 percent acceptance rate.

Cotropia and his colleagues gathered data on re-filed applications to correct for this problem. The result was this graph:

The bottom line shows the "raw" allowance rate: the fraction of applications that got a thumbs-up from patent examiners. (UPR is "utility, plant, and reissue," three categories of patent.) The next few lines shows the allowance rate after combining applications to avoid double-counting those that have been submitted more than once. The top line shows the result when all types of re-filing are accounted for.

The graph suggests that the patent office got steadily pickier during the presidency of George W. Bush. The uncorrected allowance rate fell from about 70 percent to a bit over 40 percent during Bush's eight years in office. Then after Obama appointed David Kappos to the patent office, the allowance rate rose back above 50 percent.

And the reversal looks even more dramatic after correcting for re-filed applications. The corrected allowance rate (the purple line) rose from 70 percent at the beginning of Kappos' tenure to almost 90 percent by the end.

Third time is a charm

"We made a conscious decision simply to present the facts and leave their interpretation to others," Quillen told Ars in a March e-mail. But James Bessen, a Boston University researcher whose work we've covered before, told us that the obvious interpretation was the correct one.

"The backlog is in patent applications that have been rejected, that should be rejected, but which patent office rules allow to be endlessly refiled," Bessen told us by e-mail. "The surge in allowance under Kappos is a sharp change from previous grant rates."

Of course, it's theoretically possible that the quality of patent applications suddenly started rising in 2009. But Bessen argued that was unlikely. He pointed that a lot of the current backlog consists of re-filed applications that were rejected the first time around. And he pointed to a recent study estimating that 28 percent of current patents would be found invalid by the courts, suggesting that the patent office has not done a thorough job of screening the patents.

Naturally, the USPTO disagrees with Bessen's interpretation of the data.

"Patents that are subject to a longer wait time for a first action tend to abandon at higher rates than other applications (holding all other factors constant)," a spokesman told us by e-mail. "The higher level of abandonment leads to a lower observed grant rate, measured by grants as a proportion of total disposals. Conversely, when first action pendency falls across the board, there are fewer abandonments and the grant rate rises."

In other words, the patent office says that when applicants have to wait a long time for a response, they tend to just give up. Now that the wait time is down, thanks to PTO efficiency, fewer of them are giving up. As a result, the ratio of accepted patents to rejected patents whose owners don't try again might go up even if the patent office hasn't lowered its standards.

That argument "ignores the fact that the increased backlog comes from patents that were already rejected, but then refiled," Bessen told us. "What matters is not the quality of the average patent examination, but rather the quality of the last examination," the one that leads to the patent either being granted or the applicant choosing not to re-file it.

The fundamental problem, both Quillen and Bessen agree, is that the only way to get rid of a persistent applicant is by giving him a patent. "Refiled continuing applications should be abolished," Quillen told us in a March e-mail. "This would enable the USPTO to obtain final decisions as to the patentability of applications it has examined, and would eliminate the rework that such refiled applications impose on the USPTO." That would free up resources for the USPTO to examine new applications more thoroughly.

39 Reader Comments

Seems to fall in line with the other big patent initiative under the current administration. Isn't reducing the workload on the patent office, and not improve the quality or validity of approved patents, also behind the shift to the 'first to file' system, instead of 'first to invent'? I've never figured out what the role of prior art is in a 'first to file' system.

Oldmanalex wrote:

The last statement is obviously wrong. Ability to boot patent apps out of the system really quickly would lead to disgruntled inventors suing everybody in sight. The average patent examiner after being deposed by legal sharks a couple of times, and threatened with personal liability would probably grant all applications.

If the Patent Office were doing it's job properly, this problem would resolve itself fairly quickly since the courts would back the Patent Office most of the time. The lack of payoff from the expensive litigation would then serve as a deterrent against frivolous lawsuits against the Patent Office.

One cannot simply make minor changes to a patent application, and re-file the application, as Quillen alleges. This is untrue. The requirements for Conitnuations and Continuations-in-part require that the claims of the child application be related to the subject matter of the parent application.

The notion of getting rid of "re-filing," i.e. RCEs (getting rid of continuations and CIPs is a non-starter, because you may later realize that you need to claim previously disclosed subject matter of a parent application in a subsequent, child (continuation) application) is an interesting one. One reason the USPTO won't do this is that the fees charged an Applicant for an RCE are high, and the USPTO wants this revenue. But if the USPTO does eliminate RCEs, or puts a cap on the number of RCEs, this does not solve the problem. Instead, Applicants will choose to file appeals either in court, or with the the Patent and Trademark Appeal Board. The wait for an appeal (which is an administrative proceeding in front of a panel of examiners) is already several years.

Seems to fall in line with the other big patent initiative under the current administration. Isn't reducing the workload on the patent office, and not improve the quality or validity of approved patents, also behind the shift to the 'first to file' system, instead of 'first to invent'? I've never figured out what the role of prior art is in a 'first to file' system.

No, the move behind first to file is to move the U.S. to the same first to file system used in all the other countries in the world. The U.S. was the sole country that used first to invent, I believe.

As for prior art, its role in a first to file is identical to that in a first to invent system. There are a few minor differences, such as not being able to "swear behind" prior art, but that's a practice that's generally frowned upon by practitioners.

grimlog wrote:

Oldmanalex wrote:

The last statement is obviously wrong. Ability to boot patent apps out of the system really quickly would lead to disgruntled inventors suing everybody in sight. The average patent examiner after being deposed by legal sharks a couple of times, and threatened with personal liability would probably grant all applications.

If the Patent Office were doing it's job properly, this problem would resolve itself fairly quickly since the courts would back the Patent Office most of the time. The lack of payoff from the expensive litigation would then serve as a deterrent against frivolous lawsuits against the Patent Office.

Let's remember that Congress diverts 97% of the money out of the USPTO and into the general treasury. This is one reason why patent examiners are so overworked. You make it sound like the USPTO is choosing to do a bad job. I don't think it's quite so simple.

You also allege that the courts don't back the USPTO most of the time. In fact, according to the article, the courts do back the patent office by upholding most patents to be valid. Moreover, this is what the courts are supposed to do, as patents are afforded a presumption of validity in court.

Seems like the best solution is to approve everything. Even better, make them secret patents. Everybody simply pre-pays a license fee for any possible past, present and future infringement. And have the IRS collect the fees.

You also allege that the courts don't back the USPTO most of the time. In fact, according to the article, the courts do back the patent office by upholding most patents to be valid. Moreover, this is what the courts are supposed to do, as patents are afforded a presumption of validity in court.

That seems like the major problem with patents and patent lawsuits in this country. Whether it's their fault or not, the USPTO doesn't do a good enough job on patent examinations for patents to be the basis of lawsuits for hundreds of millions of dollars. Either the patent office needs to be funded like crazy, or courts should not assume patents were correctly awarded.

So recent Democratic leaders (Clinton, Obama) are exceptionally friendly to an absurd degree of intellectual properties rights and rightsholder powers (DMCA was signed by Clinton). Never could have guessed the way Hollywood, the press, and other rightsholders support the DNC and their candidates...

Obama is well known for his love of Apple products - platforms largely dedicated to controlled ecosystems and rightsholder supremacy.

Very interesting correlations indeed.

Edit:I'm seeing lots of downvotes, not sure why, I just correlated facts which have relevant intersections to the conversation. I suppose may people are unhappy these facts may reflect poorly on just a few small aspects related to politicians and other entities for which some may have a strong affinity.

I could have stated the contrapositive, that is how much George W. Bush's administration reigned in rightsholders at the patent office during his terms. Consider then the amount of mocking Bush received at the hands of the press, pundits, actors, directors, and other parties significantly interested in intellectual property rights.

Nowhere did I make summary statements regarding one president or the other being overall better or worse for the nation. Intellectual property rights are small potatoes as far as the power of the executive branch goes, frankly the judiciary is the most dangerous with their power here, followed by the legislative.

No, the move behind first to file is to move the U.S. to the same first to file system used in all the other countries in the world. The U.S. was the sole country that used first to invent, I believe.

As for prior art, its role in a first to file is identical to that in a first to invent system. There are a few minor differences, such as not being able to "swear behind" prior art, but that's a practice that's generally frowned upon by practitioners.

...

Let's remember that Congress diverts 97% of the money out of the USPTO and into the general treasury. This is one reason why patent examiners are so overworked. You make it sound like the USPTO is choosing to do a bad job. I don't think it's quite so simple.

You also allege that the courts don't back the USPTO most of the time. In fact, according to the article, the courts do back the patent office by upholding most patents to be valid. Moreover, this is what the courts are supposed to do, as patents are afforded a presumption of validity in court.

"as patents are afforded a presumption of validity in court." There could not be a more clear statement of how the patent system is broken, since it is obvious to anyone in the software industry that the patent office is indeed, beyond a reasonable doubt, granting bogus patents with the intent of "letting the courts sort it out". If the patent examiner is not doing his job and letting the court do the actual work of checking for prior art and obviousness, and the court is assuming the patent examiner already did that, then the assumption of patent validity is ENTIRELY BOGUS. Which is obviously the case to any actual programmer- we are faced everyday with an avalanche of "how to tie your shoelaces when you are in a bus station" types of patents.

I don't know if I'd be for the complete abolishment of the ability to refile applications. It should definitely be harder, especially past the second rejection, but there should be some sort of appeals process.

I don't know if I'd be for the complete abolishment of the ability to refile applications. It should definitely be harder, especially past the second rejection, but there should be some sort of appeals process.

I believe Quillen is fine with allowing applicants to appeal a rejection. He just doesn't want the applicant, after losing on appeal, to be able to start the process over with a slightly modified version of his original application.

The last statement is obviously wrong. Ability to boot patent apps out of the system really quickly would lead to disgruntled inventors suing everybody in sight. The average patent examiner after being deposed by legal sharks a couple of times, and threatened with personal liability would probably grant all applications.

Except that the patent applicant couldn't seek any legal retribution if such a case were the law, which I'm guessing is the policy change being suggested here.

creeront wrote:

[Let's remember that Congress diverts 97% of the money out of the USPTO and into the general treasury. This is one reason why patent examiners are so overworked. You make it sound like the USPTO is choosing to do a bad job. I don't think it's quite so simple.

Those statistics are a bit misleading. The costs of the patent system are outside of just patent examinations. The USPTO budget would be like the budget of the stamp portion of the USPS. The stamp division of the USPS is probably running at an incredible profit, but the USPS itself is losing money.

Either way, the patent office is doing a horrible job. It may not be their fault that they are doing a horrible job, but they are doing a horrible job nonetheless.

Quote:

You also allege that the courts don't back the USPTO most of the time. In fact, according to the article, the courts do back the patent office by upholding most patents to be valid. Moreover, this is what the courts are supposed to do, as patents are afforded a presumption of validity in court.

That's not what's meant by 'backing the USPTO.' A large portion of the worst patents we have today are because the CAFC took very, very broad interpretations of SCOTUS case law and greatly expanded patentable subject matter into areas the USPTO felt at the time was not patentable subject matter. Backing the USPTO is when a case that has the USPTO as a defendant ends in victory for the USPTO.

a simple solution to this before you can file an infringment suit u have to send in your patents for validiation. This would stop the trolls because if their patent isnt valid they wont sue on the grounds of losing it. Where as if its good then that streamlines the trial.

a simple solution to this before you can file an infringment suit u have to send in your patents for validiation. This would stop the trolls because if their patent isnt valid they wont sue on the grounds of losing it. Where as if its good then that streamlines the trial.

That kind of thing typically happens with any sizeable suit anyway, but the problem is that evidence of a patent being invalid can happen at any point in time. Red Hat fought off a troll on a patent that was almost expired (in fact it might have already been expired by the time the trial ended). The difficult thing is that there is a LOT of prior art, and it's often very difficult to sort through. Truth be told, given enough time and prior art, virtually all patents are invalid under current law.

I find it ironic that ars likes to complain about the accuracy of scientific reporting in regular newspapers and then just drops the ball when dealing with IP/patent issues.

First, the picture is not the USPTO. That's the National Portrait Gallery--it used to be the patent office until 1932.

Second, allowance/rejection rate does not equal quality. The allowance rate is actually returning to about its historical average. So why did it dip under Dudas? He tried to focus on improving quality which tended to translate into more rejections (e.g, second pair of eyes review procedure). Examiners tended to just reject more instead of risking a bad allowance, the examination process was slowed, and the backlog increased. Neither examiners nor applicants were happy.Also, the growing backlog resulted in hiring many new examiners during these years (thousand per year was target pre-recession)--new examiners tend to have lower allowance rate due to less experience and few applications in the pipeline (it can take a year or so for patent to get allowed after being first looked at).

With Kappos, he tried to move away from the reject-reject-reject mentality and encouraged interviews between examiners and applicants--i.e., telephonic or in-person discussions over the claimed subject matter and the prior art. It helps streamline the process and increase allowance rate when everyone gets on the same page as far as what the invention is and what prior art exists. The new examiners under Dudas had also matured into experienced examiners. As for backlog, along with the thousands of new examiners, changes to the way RCE's were handled and the focus on looking at new applications helped. Though, now there is an RCE backlog of about 110,000 (backlog shifted in the examination process).

I find it ironic that ars likes to complain about the accuracy of scientific reporting in regular newspapers and then just drops the ball when dealing with IP/patent issues.

First, the picture is not the USPTO. That's the National Portrait Gallery--it used to be the patent office until 1932.

Second, allowance/rejection rate does not equal quality. The allowance rate is actually returning to about its historical average. So why did it dip under Dudas? He tried to focus on improving quality which tended to translate into more rejections (e.g, second pair of eyes review procedure). Examiners tended to just reject more instead of risking a bad allowance, the examination process was slowed, and the backlog increased. Neither examiners nor applicants were happy.Also, the growing backlog resulted in hiring many new examiners during these years (thousand per year was target pre-recession)--new examiners tend to have lower allowance rate due to less experience and few applications in the pipeline (it can take a year or so for patent to get allowed after being first looked at).

With Kappos, he tried to move away from the reject-reject-reject mentality and encouraged interviews between examiners and applicants--i.e., telephonic or in-person discussions over the claimed subject matter and the prior art. It helps streamline the process and increase allowance rate when everyone gets on the same page as far as what the invention is and what prior art exists. The new examiners under Dudas had also matured into experienced examiners. As for backlog, along with the thousands of new examiners, changes to the way RCE's were handled and the focus on looking at new applications helped. Though, now there is an RCE backlog of about 110,000 (backlog shifted in the examination process).

the sheer increase of software patents had alot to do with it. remember before the 90's no one cared about software patents besides ibm...

I have a lot of experience applying for and getting patents. I've got about 30 now. For what it's worth, none of them are software patents. Mine are in an area the patent office ostensibly has much more history with.

In my experience it has never been necessary to refile. It's routine for the examiner to initially reject most/all of the claims. But as long as the applicant responds in such a way as to overcome the objections while making it look like the examiner has done a good job, the granting of the patent is imminent. It's about documenting the examiners objections, and how they were diligently overcome.

While I admire the zeal of posters like creeront and the new person, they don't seem to be aware of this aspect of how the patent system works in the real world.

I have a lot of experience applying for and getting patents. I've got about 30 now. For what it's worth, none of them are software patents. Mine are in an area the patent office ostensibly has much more history with.

In my experience it has never been necessary to refile. It's routine for the examiner to initially reject most/all of the claims. But as long as the applicant responds in such a way as to overcome the objections while making it look like the examiner has done a good job, the granting of the patent is imminent. It's about documenting the examiners objections, and how they were diligently overcome.

While I admire the zeal of posters like creeront and the new person, they don't seem to be aware of this aspect of how the patent system works in the real world.

In my experience, it is often necessary to "reflie," i.e. to submit an RCE. As an example, if the examiner rejects all of Applicant's claims, as they do in 90%+ of applications, and those rejections are based on prior art that does not disclose or suggest the features of Applicant's claims, the typical strategy is to argue with the examiner. Sometimes this strategy is effective, but most times it is not.

At this point you'll receive a Final Office Action, which many times (say, 50%?) parrots the same rejections without considering Applicant's arguments. At this stage, an examiner interview may helpful in overcoming the rejections, but not always. If you can't make any headway, i.e. if the examiner is stubborn, "re-filing," i.e. filing an RCE may be the preferred option, because you'll get a response to your RCE long before you'd get an appeal heard before the Patent Trial and Appeal Board.

Second, allowance/rejection rate does not equal quality. The allowance rate is actually returning to about its historical average.

No, they don't perfectly equivocate, but assuming that the process works reasonably well and other factors aren't significantly changed, lower allowance rates would return a higher average patent quality. Now, there's a bit of wiggle room there, in that companies with more resources can shove lower quality patents through more easily, but if you intend to increase patent quality, lower allowance rates are pretty much a necessity.

I suppose it may actually be useful to come up with quantitative measures of exactly how the PTO is rubber stamping patents by deliberate policy. Are there any neutral parties out there to be convinced? Maybe, hard to say. It seems obvious the politicians calling the shots have made the decision to have millions of patents. Perhaps they believe patents are the same as innovation. Perhaps they are all lawyers and think all the world's economic activity should be gated by their profession. Perhaps they are serving their campaign donors.

How many can be persuaded by this sort of thing? Who are both dense enough to not already know what is going on yet honest enough to care? I guess this is worth it if there is even one. By all means, let us have scientific proof water is still wet.

Re-file a rejected patent? I never imagined the system was quite that flawed.

We need rules to encourage people to submit only the best quality and most specific patents.

A patent may need to be sent back for re-work once or twice, but if it is ultimately rejected then it should go into the public domain and become prior art. This would make it very difficult to re-file the same idea because of the prior-art. Also any claims stripped out during re-work should also become public domain.

The "re-file" is being misunderstood. It's not even a good name for it. The patent examination process can be thought of as a negotiation between examiner and patent applicant. Applicant wants broad coverage whereas examiner is supposed to ensure the scope of the claims don't overlap with prior art. When you file an application, you basically get two rounds of rejection before prosecution is closed. First a non-final rejection, then applicant files amendments and/or arguments, then examiner can issue a final rejection where prosecution is closed (can get a second non-final if the prior action was flawed, allowance can also be issued at any stage though first action allowances are rare). When applicant has a final rejection, they have three options: abandon, appeal or file a request for continued examination (RCE). Abandonment means you give up. Appeals cost a good amount of money and take 1-2 years to decide. Request for continued examination gets you another two rounds of review where applicant can add more limitations from his originally filed disclosure to further narrow the claim scope. RCE's are quite frequent (probably half the applications have em). They arent free--cost 1200 for first one, 1700 for second one and plus you have to pay your attorney all this time and they will cost more. Usually if faced with reject, reject, reject, applicant can decide either cost isnt worth it (abandonment) or file an appeal. Going beyond one or two rce's is uncommon. As noted above, it is like a negotiation and sometimes it can take a few rounds correspondence between applicant and examiner before something is settled on.

Having had a quick look at the report.... I'm not sure it really makes sense? The issue here is that surely the allowance rate as a % of Net Disposals is the appropriate value (Net disposals being the total of Allowances + Abandonments without refilings) ? I can't see how else you can correct the data - the authors don't seem to provide their methods.

Regardless, there seems to be some credibility to the USPTO's interpretation. If you look at the % of abandonment without refiling (that is, applicants who gave up), the proportion of them who were continuing applications (as opposed to original ones) increased from 2008 to 2011. So it seems, at first sight, to be arguable that what is going on is that the continuing applications are finally being processed, not that they are necessarily being accepted more often.

Edit:I'm seeing lots of downvotes, not sure why, I just correlated facts which have relevant intersections to the conversation. I suppose may people are unhappy these facts may reflect poorly on just a few small aspects related to politicians and other entities for which some may have a strong affinity.

You implied somewhat negative things / accusations of fanboi-ism. By both Democrats and Apple users.

The last statement is obviously wrong. Ability to boot patent apps out of the system really quickly would lead to disgruntled inventors suing everybody in sight. The average patent examiner after being deposed by legal sharks a couple of times, and threatened with personal liability would probably grant all applications.

Patent Examiners don't get deposed.

1701.01 Office Personnel Not To Testify [R-3]It is the policy of the United States Patent and Trademark Office (USPTO) that its employees, including patent examiners, will not appear as witnesses or give testimony in legal proceedings, except under the conditions specified in 37 CFR Part 104, Subpart C. > The definitions set forth in 37 CFR 104.1 and the exceptions in 37 CFR 104.21 are applicable to this section. < Any employee who testifies contrary to this policy will be dismissed or removed.

I find it ironic that ars likes to complain about the accuracy of scientific reporting in regular newspapers and then just drops the ball when dealing with IP/patent issues.

First, the picture is not the USPTO. That's the National Portrait Gallery--it used to be the patent office until 1932.

Second, allowance/rejection rate does not equal quality. The allowance rate is actually returning to about its historical average. So why did it dip under Dudas? He tried to focus on improving quality which tended to translate into more rejections (e.g, second pair of eyes review procedure). Examiners tended to just reject more instead of risking a bad allowance, the examination process was slowed, and the backlog increased. Neither examiners nor applicants were happy.Also, the growing backlog resulted in hiring many new examiners during these years (thousand per year was target pre-recession)--new examiners tend to have lower allowance rate due to less experience and few applications in the pipeline (it can take a year or so for patent to get allowed after being first looked at).

With Kappos, he tried to move away from the reject-reject-reject mentality and encouraged interviews between examiners and applicants--i.e., telephonic or in-person discussions over the claimed subject matter and the prior art. It helps streamline the process and increase allowance rate when everyone gets on the same page as far as what the invention is and what prior art exists. The new examiners under Dudas had also matured into experienced examiners. As for backlog, along with the thousands of new examiners, changes to the way RCE's were handled and the focus on looking at new applications helped. Though, now there is an RCE backlog of about 110,000 (backlog shifted in the examination process).

I recall Dudas testifying before Congress and bragging about improved quality and citing the lowered allowance rate as evidence of it. This always puzzled me. Assuming flawless work by the examining corps, it is conceivable that society as a whole is experiencing an innovative boom and the allowance rate would properly be quite high. On the other hand, still assuming flawless work by the examining corp, it is conceivable that society as a whole is experiencing an innovative dearth and the allowance rate would properly be quite low. Simply put, the allowance rate is independent of quality.

Under Dudas, great scrutiny was placed upon allowances (e.g., Second Pair of Eyes). Not nearly as much scrutiny was placed upon rejections. One of the metrics an examiner is evaluated on is error rate. Naturally, an examiner desires to not be dinged for errors so as to receive a favorable evaluation. Based on this system, it becomes rational for an examiner to err on the side of rejection rather than risk an increased chance of being assessed an error by allowing a case.

One of Kappos' early blog posts stated in no uncertain terms that rejection does not equal quality. Many examiners sighed great relief after reading that.

So, to my understanding, part of the upswing in allowances under Kappos is that the increase in quality under Dudas was focused in significant part on the formality failings of patent applications. Under Dudas, Examiners felt an increased pressure to find a rejection, and finding formal failings with the applications was a route to do so. Kappos sought to get rid of this pressure (essentially getting rid of false positives, where in this case a positive result is a rejection) because the appearance of a low allowance rate did not mean there was substantive quality in the examination process. Now, does this mean that under Kappos the quality of substantive examination got better? Wait 3-5 years when we have a larger sample size of patents granted under Kappos in litigation to judge that question.

Also, as part of the AIA, the fee for filing an RCE has gone up (from $270 to $1200), and the fee for filing second and subsequent RCEs has gone up as well (from $770 to $1700). My understanding (from conversations last year with people at the USPTO) is that raising the fees is in-part to deter the persistent applicants from just pounding Examiners; the best way for government to really affect public behavior is to attack the bottom line, be it by taxes or fees.

Unfortunately without the intervention of congress I doubt the system will ever get fixed, and congress won't intervene because they are all lawyers anyways. It is very unfortunate as the cost of litigation are excessively high to the point innocent people can't even protect themselves and the government is not making matters any better. So depressing

One cannot simply make minor changes to a patent application, and re-file the application, as Quillen alleges. This is untrue. The requirements for Conitnuations and Continuations-in-part require that the claims of the child application be related to the subject matter of the parent application.

The notion of getting rid of "re-filing," i.e. RCEs (getting rid of continuations and CIPs is a non-starter, because you may later realize that you need to claim previously disclosed subject matter of a parent application in a subsequent, child (continuation) application) is an interesting one. One reason the USPTO won't do this is that the fees charged an Applicant for an RCE are high, and the USPTO wants this revenue. But if the USPTO does eliminate RCEs, or puts a cap on the number of RCEs, this does not solve the problem. Instead, Applicants will choose to file appeals either in court, or with the the Patent and Trademark Appeal Board. The wait for an appeal (which is an administrative proceeding in front of a panel of examiners) is already several years.

This is wrong. Firstly, the RCE ans CIP and FW-contiuations can be repeated at infinitum basically. In practice, the application doesn't need to be changed at all. However, for an RCE, if the Examiner feels the applicant has not made an attempt to further prosecution (s)he can finalize their rejection in the first action of an RCE. In practice, this is rare as usually Applicants make some small amendments to the claims to overcome the final rejection.

Secondly, the fees charged by the USPTO for RCE's are not a motivating factor I assure you. Let's assume a primary patent examiner makes 115k per year or about $60/hour. He will have on average maybe 15-20 hours to fully examine this RCE, costing the office a minimum of $900 just in wages--not including the support staff work and the extra cost to employ the examiner (retirement, health coverage, taxes, etc.). The fees for the first RCE is $1200 so the office is hardly profiting from RCE filing. Unless there are additional fees--issue fees, extensions, etc., the Office likely loses money on RCE's.

Lastly, the USPTO tried to limit the number of continuations allowed maybe 5 years ago or something. IIRC, there was a court ruling that the proposed RCE limits would violate a persons right to a patent and an injunction was issued stopping the PTO.

Instead, the PTO reduced the amount of credit Examiners would get for processing a continuation and shifted the RCE's to a different category so Examiners would not have to work on them immediately. The obvious repercussions were that only the easy (e.g. "allowable") RCE's were processed quickly. Further, the reduced credit meant Examiner's had less incentive to force and RCE in the first place and were motivated to talk to applicants and work out allowable claims. Basically, Kappos' policies simply pushed allowable cases from the future into the present and pushed rejectable cases from the present to the future.

...The USPTO budget would be like the budget of the stamp portion of the USPS. The stamp division of the USPS is probably running at an incredible profit, but the USPS itself is losing money.

You can't really use the USPS in this example for a couple of reasons. The first is that the USPS is in financial difficulties right now not because they are losing money on their services, but because Congress is requiring them to fully fund the pensions of all of their employees they will hire for the next 75 years. Nobody else anywhere in any government agency or independent company has to do that.

...The USPTO budget would be like the budget of the stamp portion of the USPS. The stamp division of the USPS is probably running at an incredible profit, but the USPS itself is losing money.

You can't really use the USPS in this example for a couple of reasons. The first is that the USPS is in financial difficulties right now not because they are losing money on their services, but because Congress is requiring them to fully fund the pensions of all of their employees they will hire for the next 75 years. Nobody else anywhere in any government agency or independent company has to do that.

I wasn't drawing the analogy anywhere near that far. What I was saying was that the USPTO is not representative of the complete finances of the patent system in the same way that the sales of stamps are not representative of the complete finances of the postal system. The USPTO doesn't have court costs from patent cases directly deducted from their budget, but they are a cost of the patent system.

Timothy B. Lee / Timothy covers tech policy for Ars, with a particular focus on patent and copyright law, privacy, free speech, and open government. His writing has appeared in Slate, Reason, Wired, and the New York Times.